Hain Celestial continues developed market expansion

MELVILLE, N.Y. – While other food manufacturers increasingly are expanding in emerging markets such as China and India, The Hain Celestial Group, Inc. is focusing its footprint in more developed markets such as the United Kingdom, Canada and Europe.

“Before a few years ago, 80%, 90% of our sales were sold within the U.S.,” said Irwin Simon, president and chief executive officer of Hain Celestial, in a presentation at the ICR XChange Conference in Miami on Jan. 17. “If you look at it today, close to 60% is still in the U.S., and 40% outside the U.S., with the U.K. being the biggest part. And I like that breakdown.”

The company last year completed three acquisitions: The Daniels Group in the U.K.; Cully & Sully brand of fresh chilled soups in Ireland; and Europe’s Best frozen fruits and vegetables in Canada. Hain Celestial also began distributing some of its brands, including Greek Gods, Linda McCartney and recently acquired BluePrint, in those markets.

“To really get scale and to bring a lot of Hain products to the U.K., we felt we had to get into the category where there’s ambient products, dry goods,” Mr. Irwin said. “So, we acquired (Daniels). We ran it for cash; didn’t run it for growth; didn’t invest in these brands. These are household staple brands in the U.K. And we feel, hey, there’s a lot of growth, there’s pricing up here. There’s innovation. There’s cleaning up the ingredients.

“And with that, we’ll bring gluten-free products in there. We’ll bring snack products in there. We’ll bring Earth’s Best products in there as we co-brand it.”

Hain Celestial also introduced 80 products last year, Mr. Simon said.

“Innovation is key,” he said. “And being out there in front with chia seed, being out there in front with flaxseed products, being out in front with a lot more Greek yogurt products, being out in front with extruded snacks. And that’s key with Hain, is how we’re out there and ahead of trends and what consumers want.”

For the first quarter of fiscal 2013, ended Sept. 30, the company had income of $16,386,000, equal to 36c per share on the common stock, which compared with income of $11,690,000, or 27c per share, during the same quarter of the previous year. Sales for the quarter were $359,807,000, up 25% from $286,837,000.

The results did not include contributions from the juice maker BluePrint, which was acquired after the first-quarter earnings were issued.